CANADA FX DEBT-C$ hits 3-week low as U.S. yields extend climb

Reuters Staff

3 Min Read

* Canadian dollar at C$1.2878, or 77.65 U.S. cents
* Loonie touches its weakest level since April 3 at C$1.2897
* 10-year yield touches highest since Feb. 15 at 2.376
percent
TORONTO, April 25 (Reuters) - The Canadian dollar weakened
to a three-week low against its U.S. counterpart on Wednesday as
oil and stock prices fell, while the greenback added to recent
gains against a basket of major currencies.
The U.S. dollar notched a four-month high, boosted by
a rise in benchmark U.S. Treasury yields above 3 percent.
Investors worry that increased borrowing costs could slow
global growth, denting prospects for stocks and commodity-linked
currencies such as the Canadian dollar.
The price of oil, one of Canada's major exports, fell as
rising U.S. fuel inventories and production weighed on an
otherwise bullish market.
U.S. crude prices were down 0.2 percent at $67.59 a
barrel.
At 9:24 a.m. EDT (1324 GMT), the Canadian dollar
was trading 0.3 percent lower at C$1.2878 to the greenback, or
77.65 U.S. cents. The currency touched its weakest level since
April 3 at C$1.2897.
The loonie has declined 2.5 percent since the Bank of Canada
last week held its benchmark interest rate steady at 1.25
percent and said it did not know when or how aggressive it would
need to be to keep inflation in check.
Bank of Canada Governor Stephen Poloz and Senior Deputy
Governor Carolyn Wilkins are due to appear before the Senate
Standing Committee on Banking, Trade and Commerce at 4:15 p.m.
EDT (2015 GMT).
U.S. President Donald Trump said on Tuesday a new North
American Free Trade Agreement could be agreed on quickly, as
Canada hailed progress on forging new rules for the auto
industry, the pivotal issue in talks to revamp the 24-year-old
accord.
Canada sends about 75 percent of its exports to the United
States. Its economy could benefit from a NAFTA trade deal.
Canadian government bond prices were slightly lower across
much of the yield curve, with the two-year down 0.5
Canadian cent to yield 1.922 percent and the 10-year
falling 4 Canadian cents to yield 2.361 percent.
The 10-year yield touched its highest intraday since Feb. 15
at 2.376 percent.
(Reporting by Fergal Smith; editing by Jonathan Oatis)